MIDEAST STOCKS-Gulf to consolidate as oil remains soft

Reuters Staff

2 Min Read

DUBAI, June 4 (Reuters) - Gulf stock markets look set to consolidate in modest volumes on Sunday after the Brent oil price fell back below $50 a barrel at the end of last week, offsetting a rise in global stock markets.

Wall Street rose on Friday after weaker-than-expected U.S. jobs data suggested that while the U.S. central bank remained likely to hike interest rates in June, further hikes this year could be delayed.

MSCI's all-country world stock index hit a record high, rising 0.63 percent, as it posted a seventh straight week of gains and its longest winning streak since 2010.

But Gulf equity markets have tended to undperform global bourses in recent months and have responded more to uncertainty about oil prices. Brent crude fell 68 cents to settle at $49.95 on Friday.

Saudi Arabia, however, looks set to remain supported by expectations that MSCI's Annual Market Classification Review on June 20 will decide to launch a review of Riyadh for possible inclusion in MSCI's emerging market index.

Gradual buying of Saudi blue chips by foreign institutions in the last few weeks has shown some investors are positioning for the announcement.

In Dubai, key blue chip Emaar Properties, last at 7.18 dirhams, has major technical support at 7.00-7.10 dirhams (the lows since end-December) and faces resistance at the April peak of 7.58 dirhams.

Any clean break of this range could indicate medium-term direction for the stock and the Dubai market as a whole. (Reporting by Andrew Torchia)